There are a lot of costs that accumulate during the average person’s life. From things like credit bills, house mortgages, and childcare costs all those payments start to add up. Because of this, most people looks for certain costs to cut or other costs the average person typically gets and avoids them entirely. One such cost you might decide is not worth the money is a life insurance policy. Some people might have enough money saved for their dependents in the event they die, or they are in a situation where they do not have anyone relying on their income. So, the question is, should you even get life insurance in the first place? We will discuss scenarios where you may or may not need life insurance so that you can make the decision for yourself.
When Will I Need Life Insurance?
There are a lot of situations you might be in where it would be a good idea to get life insurance. Examples include:
- You have family and/or others who rely on you for financial or other support. This could mean the income from your salary from work, or maybe the work you do at home to take care of your family and other dependents.
- You have loans or debts that your family will be unable to pay off in the event that you die. Keep in mind that you may already have mortgage protection insurance for your mortgage.
- You are obligated to act as the guarantor on a mortgage for someone else.
If you have a family, then the age of your family will affect how expensive your life insurance plan will be. This is because the benefit you are entitled to will have to last longer since your children are further away from reaching adulthood and being able to take care of themselves. This will affect how much coverage you will need on top of deciding whether or not you want it at all. If you decide you want life insurance, the you will also need to ensure that you pay for enough insurance to:
- Provide steady income for your family for as long as they need it.
- Pay off your loans or mortgage. However, if you already have mortgage protection insurance you may not need life insurance to cover this issue.
- Cover larger costs that might come up in the future. An example of futures costs might include college expenses for your children.
When Will I Not Need Life Insurance?
It is possible that you may not need life insurance depending on your life. Examples of scenarios where you may not need life insurance coverage include:
- There is nobody who depends on your income.
- Your job or pension plan provides you with death-in-service benefits.
- You have enough money saved to take care of your dependents dependents if you were to die.
- Your dependents could live off of social welfare benefits they would get if you died.
- You have investments and/or property that your family could sell to provide themselves with income.
- Your children are financially independent adults.
- Your partner has a high enough income to support themselves and your shared dependents.